The latest plea deals in the Pilot Flying J fraud case mean the defense table should be a little less crowded at the October trial in Chattanooga.
USA TODAY NETWORK-Tennessee

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Former Pilot Flying J President Mark Hazelwood, left, leaves court after being arraigned Feb. 9, 2016, on charges including conspiracy to commit wire fraud and mail fraud as well as witness tampering. Seven other Pilot employees also were named in the 14-count indictment. Hazelwood faces an additional charge of witness tampering.(Photo: Michael Patrick / News Sentinel)Buy Photo

CHATTANOOGA, Tenn., - Jurors in the Pilot Flying J fraud trial are getting an earful of insider stories about the truck stop giant and the trucking industry.

The trial of former Pilot Flying J President Mark Hazelwood and three subordinates enters its second week Monday. Hazelwood, former vice president of sales Scott Wombold and regional account representatives Heather Jones and Karen Mann are being tried in U.S. District Court in Chattanooga on charges including conspiracy to commit wire and mail fraud.

Fourteen others have pleaded guilty in a scheme to defraud trucking companies of promised rebates. Pilot Flying J’s board admitted criminal responsibility to the tune of $92 million and civil responsibility for at least $85 million. The board is paying the defense tab for the four accused.

Here are five things jurors heard last week in the trial:

Test information

The scheme only worked if trucking companies weren’t paying attention to detail or didn’t understand how to track diesel fuel prices, which fluctuated greatly on a daily basis. Janet Welch, a former sales representative who has pleaded guilty, admitted she tested the sophistication of firms she and her bosses intended to defraud.

“The ones we thought we could get by with, the smaller ones, we didn’t think would catch it,” she said.

She told another Pilot Flying J staffer in an email she wanted to test a particular company her bosses were planning to short on promised fuel discounts.

“Will you stop sending the pricing, and we will see if they ask for it?” she wrote.

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News Sentinel reporter Jamie Satterfield gives a midday update on the Pilot Flying J fraud trial from Chattanooga. Four Pilot executives are on trial for cheating trucking customers on diesel rebates for 5 years.
Jamie Satterfield

The staffer responded, “I can promise you, (the company) will. They are the ones who email me constantly if it’s late.”

Testimony showed Pilot Flying J staffers also would temporarily boost the rebate amount to see if a trucking company noticed before putting the firm on the fraud target list.

Trucker beware

Salesman John Spiewak didn’t feel guilty about ripping off trucking firms that were too lazy to do their business homework, documents reviewed by jurors showed.

“He did not even know his current discount so I am going to tell him that I will change the discount and make no changes,” Spiewak wrote.

In another case, Spiewak justified his fraud because the trucking company wasn’t delivering on its end of the bargain – buying more diesel from Pilot Flying J.

“He is unwilling to narrow their network down anymore,” Spiewak wrote about why he intended to rip a firm off two pennies for each gallon of diesel bought at Pilot Flying J. A single tractor-trailer uses 1,600 gallons of diesel each month, and firms defrauded in the scheme operated dozens and hundreds of trucks depending on the size of the company.

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Fourteen Pilot Flying J ex-employees have agreed to plead guilty in the multi-million-dollar fraud. Here's what you need to know.
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Too greedy?

Welch was getting a bit worried at the boldness of fraud. In its inception in 2008, records showed, firms were shorted a penny or two on each gallon. By early 2013, though, that number was climbing.

“Customer thinks it is (3 cents) but it was really (8 cents),” she wrote. “That makes me nervous.”

She told jurors why that made her nervous.

“They were being cheated five cents,” she said.

Pilot Flying J headquarters in downtown Knoxville was raided three months after she wrote that email.

Be sweet

Former Pilot Flying J Director of Sales Arnie Ralenkotter admitted in testimony he could be ruthless in enforcing orders to defraud trucking firms. He threatened to pull accounts from a salesman who balked at shorting his customers.

But in every email Ralenkotter sent in which he talked tough there was this signature line: “Be kinder than necessary, for everyone you meet is fighting some kind of battle.”

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JImmy Haslam, CEO of Pilot Flying J, spoke with the media in 2013 on the state of the company's response to the federal investigation related to manual rebates issued to trucking company customers.

Old school

In its bid to beat competitors for trucking business, Pilot Flying J has used its retail stores to provide truckers with lots of amenities – clean showers, hot food, and, in some locations, health services.

But Ralenkotter started his career in the trucking industry when truck stops consisted of gas pumps and a bathroom. When asked during his testimony whether he sold trucking firms on Pilot Flying J because of its amenities, Ralenkotter shrugged.

“Clean showers, yeah,” he said, but, he added, all the trucking company owners cared about was saving money, so he promised bigger discounts than the competitors to get business. He conceded he didn’t intend to pay them – unless he had to.

Ralenkotter was earning $125,000 a year when the fraud scheme started. At its end in 2013, he was raking in $400,000 annually.